Child object doesn't stay relative to parent in BGE
This was a simple case of unapplied scale and rotation. The odd thing is blender handles parents with different transforms just fine, but the game engine does not.
As a general rule everything in the BGE should have a scale of one, and no rotation.

All I did is apply the scale and rotation on both the plane and the propeller, then the normal object parent worked as expected in the BGE.

Here is your fixed blend with parent working, plus you had the normals on your plane reversed.

If you haven't seen my explanation on the parenting settings, go read it here.